Romania Privatizes Energy & Transport Sector
The International Monetary Fund (IMF)—the intergovernmental organization that oversees the global economic system—has been working to pull Romania out of a crippling economic slump. Now, after years of aid, Romania will shut down, restructure or privatize various state-owned energy and transportation companies.
In 2009, Romania’s economy contracted 7.1 percent and the nation sought a €20 billion ($29 billion) loan from the IMF, European Union (EU) and World Bank (WB). As is historically customary in accepting loans from these organizations, Romania is now subject to follow strict economic guidelines as to how the government runs its own country.
In 2010, some of the most stringent economic policies of all of Europe were put into effect in Romania. Public sector wages were cut by 25 percent and sales tax increased from 19 to 24 percent.
Now, the IMF and EU have approved an extra €5 billion ($7.25 billion) loan to Romania under the pretenses that the country open portions of its energy and transportation sectors to private investment.
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The state will remain the main shareholder in cases of private investment says Romania’s IMF representative Mihai Tanasescu, “but, at the same time, these companies need investments. They need resources and capital to be able to boost their activity and to be more efficient.” Tanasescu notes that state-run companies will sell minority shares to private investors.
However, one should not assume that just because the IMF is willing to lend money that a nation is in the clear when it comes to its economic security. IMF activities—specifically, granting loans under the pretense of strict policy guidelines—has oftentimes had devastating effects. The IMF’s activity in Argentina for example left the country worse off than before, and similar activities in Venezuela would have crippled the country had Venezuela not been able to exploit its vast oil reserves and impose its own social protectionist policies.
Essentially, an IMF and World Bank-backed economic rescue inevitably involves privatization of state-run companies and resources, allowing international companies to come in and take root. While this may offer a quick fix, essentially the nation receiving the aid is handing over its sovereignty to a certain degree. This is truly ironic in times like these, since it’s the international banks and lending organizations that caused the economic crash in the first place. Unfortunately, it seems Romania may be out of options and will have to succumb to IMF guidelines. International investors should be excited by the prospect, but average Romanian citizens will bear the long-term consequences of privatization—whether they be positive or negative.
Hydrostor receives $4m funding for A-CAES facility in Canada
Hydrostor has received $4m funding to develop a 300-500MW Advanced Compressed Air Energy Storage (A-CAES) facility in Canada.
The funding will be used to complete essential engineering and planning, and enable Hydrostor to plan construction.
The project will be modeled on Hydrostor’s commercially operating Goderich storage facility, providing up to 12 hours of energy storage.
Hydrostor’s A-CAES system supports Canada’s green economic transition by designing, building, and operating emissions-free energy storage facilities, and employing people, suppliers, and technologies from the oil and gas sector.
The Honorable Seamus O’Regan, Jr. Minister of Natural Resources, said: “Investing in clean technology will lower emissions and increase our competitiveness. This is how we get to net zero by 2050.”
A-CAES has the potential to lower greenhouse gas emissions by enabling the transition to a cleaner and more flexible electricity grid. Specifically, the low-impact and cost-effective technology will reduce the use of fossil fuels and will provide reliable and bankable energy storage solutions for utilities and regulators, while integrating renewable energy for sustainable growth.
Curtis VanWalleghem, Hydrostor’s Chief Executive Officer, said: “We are grateful for the federal government’s support of our long duration energy storage solution that is critical to enabling the clean energy transition. This made-in-Canada solution, with the support of NRCan and Sustainable Development Technology Canada, is ready to be widely deployed within Canada and globally to lower electricity rates and decarbonize the electricity sector."
The Rosamond A-CAES 500MW Project is under advanced development and targeting a 2024 launch. It is designed to turn California’s growing solar and wind resources into on-demand peak capacity while allowing for closure of fossil fuel generating stations.
Hydrostor closed US$37 million (C$49 million) in growth financing in September 2019.